Post on 14-Jul-2015
Enhancing the Retail Omnichannel Customer Experience
Today’s Speakers
Peter Zaballos Vice President, Marketing & Product SPS Commerce
Todd Kozan Principal Consultant, eBusiness and Channel Strategy Forrester Research
© 2014 SPS Commerce 2
• The power of the consumer • Omnichannel readiness • Forrester study findings and insights • Q&A
Agenda
© 2014 SPS Commerce 3
SPS Commerce – the cloud retail leader
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1 55K trading partners
Membership
1.3M products
Sourcing
7K companies 35M
UPCs
Item Management
Support all models
Fulfillment
300K
retail locations
Analysis
$1+T orders annually
Volume
The perfect order ‒ 2009 © 2014 SPS Commerce 5
retailer vendor
On time Complete
Damage-free Complete & accurate
documentation
Consumer
The omnichannel perfect order - 2014 © 2014 SPS Commerce 6
Product Informa.on Social valida.on
Inventory informa.on
Compe..ve pricing Convenient fulfillment
Convenient returns
retailer
vendor
3PL
Consumers are driving change
Source: 2014 Annual SPS Commerce Retail Benchmark Survey
65%
Expect more product variety 82%
Expect to buy online and return in-store
The rise of the omnichannel consumer
$300B e-commerce sales
$1.4T web-influenced sales
Omnichannel execution is lagging demand
Source: 2014 Annual SPS Commerce Retail Benchmark Survey
52% “Other priorities” ahead of omnichannel
34% “Legacy systems” holding back change
43% “Don’t know what percent of sales originate via mobile”
4% of retailers and suppliers have executed an omnichannel strategy
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Making Leaders Successful Every Day
We help you make better decisions in a world where technology is radically changing your customers.
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SPS Webinar: Enhancing The Retail Omnichannel Customer Experience January 22, 2015
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Agenda
› Why are we here? › How do we define omnichannel? › Consumer trends › The market potential › The digital and physical worlds collide › The new shopping experience - it’s mobile guided › Q&A
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Why are we here?
› SPS Commerce commissioned Forrester Consulting to examine the hypothesis that retailers must provide a seamless, omnichannel user experience, increasingly driven by mobile, to achieve success.
› This study evaluates how consumers are currently engaging with retailers and explores the current capabilities of retailers to meet consumers’ growing expectations.
› Existing consumer data from Forrester’s Consumer Technographics was used, as well as data from a custom survey of 50 retail decision-makers responsible for merchandising, purchasing, operations, supply chain or IT.
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Source - http://en.wikipedia.org/wiki/Omni-channel_Retailing
What do we mean when we say omnichannel?
Omnichannel refers to a seamless approach to the consumer experience
through all available shopping channels, i.e., mobile devices,
computers, brick-and-mortar, television, catalog and so on
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The Age of the Customer: A new era led by empowered customers
Age of manufacturing Mass manufacturing makes industrial powerhouses successful
• Ford • Boeing • GE • RCA
Age of distribution Global connections and transportation systems make distribution key
• Wal-Mart • Toyota • P&G • UPS
Age of information Connected PCs and supply chains mean those that control information flow dominate • Amazon • Google • Comcast • Capital One
Age of the customer Empowered buyers demand a new level of customer obsession
• Macy’s • Nike • Beats Headphones • Amazon
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The Age of the Customer: A new era led by empowered customers
Age of manufacturing Mass manufacturing makes industrial powerhouses successful
• Ford • Boeing • GE • RCA
Age of distribution Global connections and transportation systems make distribution key
• Wal-Mart • Toyota • P&G • UPS
Age of information Connected PCs and supply chains mean those that control information flow dominate • Amazon • Google • Comcast • Capital One
Age of the customer Empowered buyers demand a new level of customer obsession
• Macy’s • Nike • Beats Headphones • Amazon
The age of the customer is a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.
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Turn big data into business
insights
Transform the customer experience
Accelerate your digital business
Age of the Customer
Embrace the mobile mind shift
In the Age of the Customer, organizations need to focus on four market imperatives
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Innovative businesses continuously exploit digital technologies to create both new sources of value for customers and increase operational agility in servicing their customers.
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For consumers, as digital engagement increases the influence of traditional touchpoints declines
Source: April 2014 “Understand The Digital Business Landscape” report
Customers are relying less on traditional touchpoints
!
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Your sales force is also being impacted by digital disruption
Customers expect sales people to have access to key content and information
!
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You must become a digital business… But why?
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Your customers are digital
By 2018…
85% of US adults will own mobile phones
82% of EU adults will own mobile phones
64% of metropolitan APAC adults will own mobile phones
70% of metropolitan Latin American adults will own mobile phones
Source: Forrester Research Online Retail Forecasts 2013 – 2018; Note: figures represent specific markets (see notes for more detail)
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Your customers are digital
Empowered customers and employees will
expect experiences that are device agnostic…
…and will support them in their moment of need
Sources: Forrester Research World Smartphone Adoption Forecast, 2012 to 2017 (Global); Forrester Research World Tablet Adoption Forecast, 2012 to 2017 (Global); Forrester’s US Mobile Mind Shift Online Survey, Q3 2013
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Source: North American Consumer Technographics Online Benchmark Survey (Part 1), 2014
And your customers are digital from many locations
“Where do you use each of the following devices to access the internet?”
Base: US online adults 18+ (online weekly or more) who access the internet on a cell phone
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Your channels are digital
Annually by 2018…
$294B will be spent online in North America
€224B will be spent online in Europe
$858B will be spent online in APAC
$47B will be spent online in Latin America
Source: Forrester Research Online Retail Forecasts 2013 – 2018; Note: figures represent specific markets (see notes for more detail)
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Source: April 16, 2014 “Understand The Digital Business Landscape” report
Digital businesses are different
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The businesses that survive will master two critical aspects of digital – digital customer experience and digital operational excellence
Source: April 2014 “The Digital Business Imperative” report
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Source: A commissioned study conducted by Forrester Consulting on behalf of SPS Commerce, July 2014
Which are the top 3 priorities to which your company is planning to apply, or have already applied, resources to advance your omnichannel strategy?
10%
12%
14%
14%
22%
8%
10%
2%
8%
22%
8%
10%
14%
10%
16%
Monitoring social media
Adding items/SKUs
Providing cross-channel inventory visibility
Equipping in-store employees with mobile apps
Enhancing e-commerce site(s)
Rank 1 Rank 2 Rank 3
Base: 50 retail decision makers responsible for merchandising, purchasing, operations, supply chain, or IT
Those that are mastering both the digital customer experience and operational excellence are focused in a few key areas
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2% 2%
8% 12%
22% 28% 28%
32% 58% 60%
Other BLE/proximity systems
ERP systems Sourcing communities
Search functionality Fulfillment automation
Mobile apps Item management / catalogs
Point-of-Sale solutions Customer analytics
Source: A commissioned study conducted by Forrester Consulting on behalf of SPS Commerce, July 2014
What technologies
are most critical to your omnichannel
initiative?
Base: 50 retail decision makers responsible for merchandising, purchasing, operations, supply chain, or IT
Based on their priorities retailers are focused on several key technologies
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Why are retailers focused on these initiatives and what’s the long term view?
› It’s clear that digital and physical stores are colliding and unlocking new value for retailers and their customers
› Customers are beginning to expect a higher level of digital engagement while shopping in the store
› Retailers are figuring out how to use analytics to deliver a more personalized and relevant experience for their customers
› For retailers, this means Marketing and eBusiness teams need to partner tightly with IT to win, serve and retain customers
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Which of the following, if any, have you used your mobile phone for in the PAST 3 MONTHS?
8% 9% 9% 10%
13% 13% 13%
17% 18% 18%
20% 20%
22% 24%
33%
To reserve items at a store for pickup To store/save a receipt
To store my membership card/loyalty To store gift cards
To scan 2-D barcodes To learn about an in-store promotion
To access my loyalty rewards account To check in-store availability of a
To compare physical store prices with To check availability of a product in an
To find or redeem a coupon/coupon To look up product information while
To purchase a product To read customer reviews of a product
To research a product
Base: 4814 US Online Adults 18+ (Online Weekly or More) MOBILE PHONE USERS Source: North American Technographics Retail Survey, 2013 (US), Forrester Research, Inc.
The early adopters have focused on this for good reason - mobile usage when shopping is strong across a number of use cases
Customers are not only researching products but also
buying and looking up product
information while shopping in stores
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Find What I Need
The app lets you know early in the browsing process that the product is available in-store
Home Depot’s native app is excellent at addressing many of these key mobile uses cases and makes a real connection with their stores
Search for a Product Launch the App
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Not only does the Home Depot app tell you what’s available but it also tells you where in store it’s located
Home Depot provides the exact
amount in stock and location in-store.
Home Depot provides inventory visibility across the browsing experience and allows a user to look
at other stores
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Target’s retail app also provides clear inventory visibility and tells you which store has availability
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Once you add an item to your cart Target tells you the exact location of the item via a pinch and zoom store map
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Understand buying and inventory trends will enable a more personalized experience for users in-store and online
Deliver targeted mobile experiences Make use of customer
shared profile information and past purchase history
to help improve the relevancy of offers that are shared with the end user which, in turn, will drive
better engagement.
Despite having the user connect
through Facebook and allowing
access to personal
information, Target failed to
recommend relevant coupons
for the user.
Source: Target Cartwheel app
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16%
16%
16%
17%
10%
32%
32%
30%
29%
26%
36%
44%
47%
39%
41%
13%
7%
8%
11%
20%
Find/redeem a coupon/coupon code
Look up product information
Compare physical store prices with online prices
Read product reviews
Scan 2-D barcodes
Every time Most of the time Sometimes Rarely Never
Base: Varied counts of US Online Adults 18+ (Online Weekly or More) MOBILE PHONE USERS WHO HAVE DONE THE MENTIONED ACTIVITES ON THEIR MOBILE PHONE IN THE PAST 3 MONTHS Source: North American Technographics Retail Survey, 2013 (US), Forrester Research, Inc
How often do you do each of the following activities on your mobile phone while shopping in a physical store?
It’s clear customers are using their phone while in a store but what are they doing?
Across three in store use cases,
48% of customers are using their phone most of
the time or all the time
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Walmart addresses mobile in-store shopping needs by offering a “smart shopping list” when the app is in “store mode”
Shopping lists can be set before a visit to the store. Items can be easily added from “Favorites” and “Basket History.” Once at the store, the application switches to “Store Mode” a guided break down of in-store product
locations, offers, and pricing is available.
Unfortunately, shopping lists are
not synced between mobile
and desktop/tablet:
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Target uses text messaging to deliver offers to customers in the store that can be instantly redeemed at checkout
Target prompts users to text in to receive extra discounts while in a store. After texting in “extra4,” the user will then receive a link response with a barcode that can
be scanned at checkout.
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Walgreen’s mobile app automatically switches to store mode when in a store and prompts the users with their balance reward card and coupons
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Source: A commissioned study conducted by Forrester Consulting on behalf of SPS Commerce, July 2014
How effective are the following applications/technologies at driving sales?
6%
6%
14%
18%
26%
28%
46%
26%
14%
30%
16%
16%
32%
22%
22%
30%
20%
22%
12%
18%
14%
12%
16%
14%
12%
8%
6%
16%
16%
22%
14%
18%
6%
6%
8%
12%
6%
6%
12%
10%
6%
10%
Multi-retailer apps
BLE/proximity-based promotions
In-store QR code promotions
Multi-retailer coupon apps
Flash sale opportunities
Retailer app
Loyalty/rewards programs
Significant effect on driving sales (5) 4 3 2 No effect on sales (1) Don't know NA
Base: 50 retail decision makers responsible for merchandising, purchasing, operations, supply chain, or IT
In an omnichannel world retailers are finding several key tactics have a significant effect on sales
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Starbucks’ loyalty profiles for customers display key
information, including current card balance, the number of
stars a customer has unlocked, the amount of stars
to achieve the next free reward, and a month by month history of rewards
earned.
Companies like Starbucks have capitalized by building robust loyalty and rewards programs that have been well embraced by consumers
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7-Eleven offers locations based coupons and rewards to drive consumers to their stores
Instructional
content effectively
communicates the value of
using the app.
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Using analytics to understand buying trends is critical › Most companies and retailers struggle with mobile analytics in the context of an omnichannel experience
› Most focus on key metrics such as engagement, customer satisfaction and revenue
› Instead of solely focusing on engagement and revenue glean insights from the analytics to improve the overall customer experience by making it relevant and contextual
› This focus will yield longer term outcomes around engagement and revenue Source: December 2014, “Digital Business Pros Must Use Analytics to Deliver Simplified, Relevant Experiences” report
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The omnichannel experience is here to stay and mobile is a key component › IF you’re just embarking on the omnichannel journey
• Understand your customers behaviors online and in-store • Understand how they are using mobile • Assess your maturity when it comes to key omnichannel use cases such as buy online and pick up
in store • Conduct a rigorous technology assessment to identify gaps
› IF you’re further along: • Continue to optimize mobile to deliver personalized experiences while in-store • Choose the right assortment for store pickup • Deliver on customer SLAs that meet or exceed standard market offerings • Market in-store pickup as a competitive value proposition • Incentivize customers to add items to in-store pickup orders
Questions
46